Promotion

Wimco does not advertise for an undifferentiated and low value product such as its Ship brand of matchboxes.

Wimco, post acquisition by ITC in 2005, leverages the mighty distribution network of ITC Cigarettes across India.

Sales promotion are a consistent feature and one of the only ways of promotion to dealers and distributors. The sales promotion model may include various schemes such as:
1. Get one pack for ten empty packs.
2. Cash discounts.
3. Sponsored vacation on target sales.
and many more.

Let us examine the promotion opportunities in the matchbox ecosystem.

Sales of Ship matches are in direct correlation to the sales of cigarettes. Which means that the more advertising there is for an extremely organized sector such as cigarettes, the more opportunities there are for pushing Ship as a brand.
In India, direct as well as surrogate advertising for tobacco has been banned as of 2013. Advertising for matchboxes associated with tobacco vendors also falls into the debatable category of surrogate advertising.

Let us assume for a moment that advertising matchboxes was hurdle free. Would WIMCO then, allocate any substantial budget for promoting its Ship brand of matches?
The answer is probably not. For a product that is completely undifferentiated in the market, and of such low value, with an annual growth rate of less than 1%, it remains non feasible for WIMCO to allocate any substantial budget to promotion.

Customer Value Hierarchy

Core Benefit: The consumer of a matchbox is not really consuming the matchbox. He or she wants to create a fire to accomplish something else, example light a stove to cook food. Therefore the core benefit for this particular consumer, when purchasing a matchbox, is making and eating food.

Basic Product: let us take the example of domestic airlines. the core benefit would be to commute from one place to another in the fastest possible way commercially. The basic product would include the flight itself along with a pilot, co pilot, cabin crew, seats to sit on and basic safety equipment like the seatbelt. These features will remain consistent throughout all competitors as this is the basic offering of each one. In the case of matchboxes, the basic product is simply the matchbox with matches inside and a friction pad on the side.

Expected Product: Assuming a rational consumer has the awareness of the basic product he or she is about to purchase, there will be certain basic expectations while purchasing the product. Eg: In case of the airline as above, the consumer will expect clean seats and a pilot with a sound mind operating the aircraft. He might expect the air hostesses to be very attractive and he might also expect more leg space on his seat.
Therefore any direct service or feature that a consumer could fathom, having knowledge of the basic product, to build on his or her own experience of that product is, for this purpose, an expected product.
In case of SHIP matchboxes, a consumer expects nothing more to do with the matchbox than light a fire and hence the expected product is little or nil. At the most, He or she might want a longer stick to support the flame (which is also available under different branding and positioning altogether).

Augmented Product: This includes improvements on the product as against its competition in a way that exceeds consumer expectations. An augmented product draws a sense of awe because it is something that the consumer would not imagine to exist.
A hypothetical example of an augmented product in the gadget industry would be a phone the size of a palm that doesnt need charging at all. It remains unaffected by water, dust and shock. It could be wrapped around your wrist since it would be bendable and doubles up as a smart watch.

Potential product:
We saw the death of the typewriter just as we saw the potential in the infancy of the desktop computer. The desktop computer was at that time, the potential product which created a brand new industry life cycle for itself at the cost of flattening the industry life cycle graph of the typewriter. The desktop computer was the future of the typewriter. It could be said that augmented products may have within them the power to create requirements around themselves and hence create their own demand. 

Industry life cycle

WIMCO was established in 1923 during British India and has, since then, pioneered the industry from growth, maturity and now during decline.

The matchbox industry has had perhaps one of the flattest graphs in maturity and even now in decline. The matchbox industry barely growing at 1% per annum will plateau at an estimated point of loss in 2 decades from now, is clearly in its decline phase (considering even the rural market). 

Customer buying decision

Broadly, the diagram above highlights the buying process of a customer.
equating the above with the buying process of a customer of Ship, we can see that the there is no direct need that can be established with lighting a match. creating fire is a means to an end; the end being smoking a cigarette or having a nice smelling room by lighting an agarbatti etc.

having established a need for which one needs fire, the customer now evaluates from where he or she can accomplish creating fire. It could be a lighter, a matchstick or a stove; in the order of convenience.
or a matchstick, lighter then stove; in the order of cost effectiveness.

Depending on availability coupled with the above two priorities, the customer has now decided to purchase a matchbox. He or she will now decide (or in this case not decide but be pushed with) a brand to purchase. Giving credence to the strong distribution system of WIMCO, let us assume the retailer was stocked on Ship.

The customer has now purchased a Ship matchbox, post which there seems to be no post purchase evaluation considering the low value of the product and the consumers indifference to that value. 

Communicating Value

The Rs 1 matchbox segment is one of the most undifferentiated and fragmented market. Put simply, as a consumer, I am indifferent towards the various matchbox brands floating around the retailer. As a consumer, i purchase any brand that my retailer pushes.
In other words, for a consumer, a matchbox is a matchbox is a matchbox and as long as it lights whatever it is that the consumer wishes to light, he or she will have no preference or positive loyalty towards any brand.
Having said that, if the matchbox is defective or for any reason fails to light that one match or accomplishes it in more that 3-4-5 strikes, i as a consistent consumer, I may develop a resistance to said brand. I as a consumer can, in this case, can only develop a negative relationship/ Loyalty with a given brand if the brand fails to meet its promised quality.

When we speak of value, we speak in terms of the following:
Ethos (brand authority/ credibility),
Pathos (emotional connect) and
Logos (logical or utility driven)
that motivate a customer to purchase said product over competing products.

Ship as a product and as brand fails to meet any of these criteria to establish value for customers.
Up until AIM was launched, Ship was the only brand that offered carborised matches but since AIM in 2004, the market has become almost perfectly competitive. There seems to be no new innovations in the fast stagnating market of the matchbox with which manufactures can hope to differentiate their product.
AIM did explore this problem and tried to differentiate its matchbox by providing historical information and other facts on the backside of its matchbox but to no avail.

For the customer or the consumer, there seems to be NO VALUE in choosing Ship as brand as of 2014 today.

*I am using customer and consumer as one in the same for the purpose of my product and for the purpose of communicating value as no definite line can be drawn to differentiate the two terms in this case.

RETAILER

As far as the retailer is concerned, to him, better prices in bulk buying and a personal relationship with the dealer or manufacturer is the only reason for him to stock one brand against another.
The product as such, again ads little value to the retailer from a micro view. Considering the fact that not stocking one brand of matches might strain his relationship with the manufacturer and thus lead to less favorable conditions when buying other products that the manufacturer sells to him.

Understanding the market and the competition

Wimcos Ship has dominated the market for over 15 years in consort with other small scale manufacturers with weaker distribution networks. It was only recently in 2004 that ITC, the cigarette giant, entered the almost stagnating marketplace of matches by launching an entry level match which goes by the name AIM. Leveraging on its massive distribution network, they were able to penetrate not just urban retailers and cigarette shops but also rural shops which constitute a majority chunk of the market. ITC brings to the table a distribution network like no other. Maintaining personal relationships with retailers, they have almost completely eliminated the wholesalers as part of their network.

Although the matchbox market is to some extent defined by the cigarette smoking population, almost 54% of the market constitutes matches used to light stoves, agarbattis etc in rural and some urban households. This is not a market Ship as a brand is looking at. This 54% pertains to the safety matches category with longer sticks and thicker blots for convenient lighting at home.

Ship as a brand is directly and vehemently competing with AIM from ITC in an industry that is barely growing at the rate of 1% pa owing to the decline in the rate of smokers per year as against the use of lighters as a substitute.

My product

Manufactured by WIMCO Ltd, Ship matchboxes are wooden matches that penetrate over 5% of the Indian matchbox market. These are entry level matches that are available for the price of Rs 1 per matchbox. Ship matches are machine made and as such, their quality is highly consistent. Ship matchboxes are Carborised which offers the following advantages:

1.  They are suitable to use in moist conditions and do not get damp.
2.  They Light at once on contact.
3.  Get extinguished with a single puff.
4.  The tip does not glow or fall off after having being extinguished.

Production process-

1. Log yard-

Wood received from the forest and other sources and stocking woods on

platforms and in the tanks is done here.

2. Peeling-

The wood is peeled in the layers and used for manufacture of splints.

3. Dipping-

The splint heads are dipped in the fire producing chemicals and match

sticks are produced.

4. Chambon-

The manufacturing and printing of outer box labels in the four-side

friction is done on the Chambon machine.

5. Slitting and rewinding-

Cutting of outer box, paper board and inner box along

with slitting and rewinding is done in this unit.

6. Card Board Line-

This produce the outer and inner box and closes them.

7. Box Filling-

Matchsticks are filled in the matchboxes and the excise stamps are

affixed here.

8. Packaging-

Boxes are packed in 10’s and 600 boxes in a container.